Cohabitation law in the Supreme Court

By 6 December 2011Law news

You may have seen a few pieces in the paper over the past couple of weeks about the case of Jones v Kernott, in which the highest court in England & Wales was tasked with looking at the law that applies to dividing the property of those who lived together without being married to (or, for same-sex couples, without being in a civil partnership with) each other.

As general background, it’s important to understand that marriage confers certain rights on each married person against the other if the marriage should end: the right to have a court determine the division of property and income between them, for example. There is no specialist legal framework like this for those who separate after a cohabiting relationship has come to an end. There is no such thing as a “common law wife” in this context. Children always have a right to maintenance from the parent with whom they do not live, whether their parents were married or not, but there are no avenues for maintenance for former cohabitants in their own right. Usually, one cohabitant’s entitlement to the other’s property will depend on establishing ownership, or part ownership (for example, under an implied trust), of the particular asset in question.

In terms of the case that the Supreme Court has just decided, Mr Kernott and Ms Jones lived together for 8 years in a home they jointly owned before they separated. Mr Kernott moved out and Ms Jones and their child remained in the home. Mr Kernott needed to buy himself a house and did not have much spare cash; Ms Jones took on the mortgage payments and all expenses on their former family home and did not ask him for any child support. Many years later Mr Kernott asked for the value of his half share. Ms Jones argued that the understanding between them was that as she had looked after the house and the child over the years without asking for his financial help, Mr Kernott’s share would be reduced over time as a form of compensation – she suggested that he was now entitled to about 10% of the house’s value. In legal terms, Ms Jones claimed that she had acted to her detriment as a result of Mr Kernott’s actions and this had led to a constructive trust in her favour.

The trial judge agreed with Ms Jones and quantified Mr Kernott’s share in the property as 10%. The case eventually found its way to the Court of Appeal, which held that on strict property law principles, the shares of each person had not changed as a result of what happened after they were decided in the first place, i.e each owned 50% – it was not up to the court to decide what was fair when they could not determine the parties’ intentions. The Supreme Court agreed with the original trial judge and restored the first decision, re-awarding Ms Jones 90% of the value of the home. They concluded that where there was an agreement that shares in the property would change, but it is impossible to determine what shares they should change to, the court can itself decide what is fair in all the circumstances and divide the property in that way.

This decision has made it slightly easier for couples who live together without being married to each other or in a civil partnership to achieve a fair settlement of property disputes when they separate, and gives the court slightly more scope for paying attention to all of the surrounding circumstances of a case rather than simply strict property entitlements that can clearly be proved. However, the law in this area is still underdeveloped and confusing, and it seems that the court will require quite specific circumstances before they will intervene to impose their version of fairness in a cohabitation case. Lawyers are still analysing what the end effect of the decision will be but the general view is that we’re no further forward on being able to advise clients with any certainty what they are entitled to take away from a cohabiting relationship.

The government has recently signalled that it does not intend to enact any of the recommendations made by the Law Commission in 2007 about giving certain rights to certain classes of cohabitant after their relationship has ended (see here for the Law Commission’s response). This announcement was expected, but could be considered to have been a ‘red rag to a bull’ in respect of the Supreme Court’s task in Jones v Kernott. In its judgment, the Supreme Court has gone as far as it can go to introduce the concept of ‘fairness’ into disputes on cohabitation breakdown, but its efforts are no substitute for a well-thought out scheme of legislation to offer a coherent framework for those separating from another person to whom they have not been in a formally-recognised relationship. In our view, this is what we really need to avoid the worst effects of cohabitation breakdown: poverty, injustice and permanently damaged family relationships.

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